AUD/USD posts solid weekly gains, looks again to recent highs
- After a correction to the 0.7650 area, AUD/USD resumed the upside.
- US dollar ends week on a negative tone after a reversal.
On Friday, it reversed sharply during the American session rising back above 0.7750. The AUD/USD rose sharply during Friday’s American session, climbing from 0.7720 to 7765, the new daily high. Near the end of the week, it was hovering around 0.7760, holding onto a weekly gain of almost a hundred pips.
The key driver on Friday was the US dollar that tumbled during the American session. Metals jumped boosting further AUD/USD. The DXY was at multi-day highs and turned negative for the day, falling below 90.40.
All the positive signs the dollar was offering were evaporated in a few minutes. Higher US yield appears to have help limiting the decline on Friday, ahead of a long weekend in the US.
The Australian dollar was the best performer during the week among G10 currencies, recovering after the slide following the Reserve Bank of Australia meeting. “We see AUD as the most vulnerable currency in the G10 $-bloc due to its ever more unattractive rate profile after the RBA dovish shift and the material risks of iron ore price corrections. We remain bullish on AUD/USD in the medium-term as we think the global reflation story and a generalized weak-USD environment should ultimately prevail and push the pair above 0.80 in 2H21”, explained analysts at ING.
Technical levels